“Douglas Beats Sales Forecast on New Stores' Business, Higher German Demand”

Douglas Beats Sales Forecast on New Stores' Business, Higher German Demand

Posted: 07 Oct 2010 01:14 AM PDT

Douglas Holding AG, Europe's largest retailer of makeup and perfumes, beat its own and analysts' full-year sales predictions as new stores attracted customers and Germans bought more fragrances, jewelry and books.

Revenue in the 12 months through September rose 3.7 percent to 3.32 billion euros ($4.64 billion) from 3.2 billion euros a year earlier, the Hagen, Germany-based company said today in a statement. The increase exceeded Douglas's forecast of an increase at the upper end of a 0 percent-to-2 percent range. Sales topped the 3.27 billion-euro average estimate of 19 analysts surveyed by Bloomberg News.

Germany's retail sales will rise about 1.5 percent this year after the recession led to a revenue decline of 2 percent in 2009, the Berlin-based HDE industry group said last month, raising the forecast from an outlook for no revenue growth. The country's economy expanded at a record pace in the second quarter and unemployment continued to decline in September.

The company "has built a good foundation for the important Christmas business" in December, Christoph Schlienkamp, an analyst at Bankhaus Lampe in Dusseldorf, Germany, with a "hold" recommendation on the stock, said in a phone interview.

Douglas rose as much as 30 cents, or 0.8 percent, to 37.69 euros, the highest intraday price since Jan. 8, 2008, and was up 0.1 percent as of 9:52 a.m. in Frankfurt trading. The stock has gained 10 percent in 2010, valuing the company at 1.47 billion euros.

Same-Store Sales

Sales at stores open at least a year rose 0.4 percent. Douglas's domestic market accounted for about 65 percent of revenue, and sales in Germany increased 4.6 percent compared with 2 percent growth abroad. The retailer, which operates stores in 21 countries, said full-year pretax profit was probably at the "upper end" of its forecast range of 120 million euros to 130 million euros. The company is scheduled to report full earnings figures on Jan. 12.

Perfume and cosmetics sales rose 1.3 percent to 1.88 billion euros, advancing 2.9 percent in Germany while dropping 0.3 percent in other markets. Jewelry revenue increased 6.1 percent to 310 million euros while revenue at Douglas's Thalia bookstore chain gained 10 percent to 905 million euros, propelled by the unit taking a majority stake in buch.de, an online service.

To contact the reporter on this story: Holger Elfes in Dusseldorf, Germany, at helfes@bloomberg.net.

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net.

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